31 July 2009

Doorstop Lenders - What's your View?

Loan lenders Provident Financial have been in the firing line from concerned charities this week as they have announced healthy profits for the first half of 2009.

Provident provide "doorstop loans" aimed at poorer households - the credit criteria is low (those with a poor rating will be considered) and payments are collected by a Provident representative who visits borrower households.

But charities are arguing that the profits and customer rises to such loan lenders matches the rise in umemployment and bad debts in the UK. They say that a family drawn into a homeowner or personal loan from Provident could end up much worse off when faced with the 545 APR rate.

Indeed, the numbers owing money to Provident has grown to the hundreds of millions.

But Provident say that they are a responsible company with responsible criteria. What do you think? Should companies like Provident be targeting poorer households or should there be a largescale review in this type of lending practice?